Think you're ready to start franchising your business? Not so fast. Franchising is a lucrative business model, and it can be an excellent way to expand your brand.
But before you embark on the franchising journey, you need to make sure that you are fully prepared.
Because if you are not careful, you can fail as a franchisor and possible put your business at risk too.
Jeff Sinelli of WhichWich fame recently discussed 3 important questions to ask yourself before franchising.
As a 3-time franchisor and current CEO of Which Wich, Sinelli knows what he is talking about.
Here are the 3 question he suggests asking before diving into the deep end of the franchising pool.
Why now? Choosing to franchise your business is just like any other major life choice -- having kids, purchasing a house, choosing to get a graduate degree -- there is a right and a wrong time for it. After all, if you had just lost your job, it probably wouldn't be an ideal time to purchase a home. Think about why now is the right time to franchise. Do you have the necessary resources? Are you financially able to do so? Will you be able to make the necessary changes in your schedule to accommodate extra work? You need a clear and solid reason as to why now is a good time to start franchising. In other words, you need a clear understanding of your purpose, incentive, and sales as well the needs of your clientele.
Is there a line out the door?If there is no popular demand for your business, it probably isn't a wise idea to jump into franchising. For the franchise model to be successful, the product or service your business offers needs to be lucrative. It needs to attract other entrepreneurs. If you are having trouble making ends meet, don't expect others to want to jump onboard and adopt your business model. Jeff Sinelli, founder of the Dallas-based franchise Which Wich, explains that you really need a line of customers out the door before considering franchising. "If people are willing to wait for your service, in our instant gratification culture, your next responsibility is to evaluate the line. Are these returning customers? Are they asking questions about getting involved? These are signs that you may be on your way to a franchise" said Sinelli.
Have you put in the time? It's not all about product and popular demand. Franchising requires a significant amount of time and experience on the part of the franchisor. If you haven't been in business for at least one year, you need to drop the idea of franchising. You absolutely need a bare minimum of one full year of company history, data, operations, systems, and sales records for a clear idea of how your company would operate in all four seasons. Without a history to provide data on the patterns and fluctuations in your company, there is no way that you can plan for the future.
From the outside, franchising might seem like an easy way to grow your business, but it's not all that easy. If you can't come up with clear, compelling answers to these three questions, you probably aren't ready to franchise.
To learn more about Jeff Sinelli, please see this link: http://www.whichwich.com/chief_vibe_officer
Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively.